Caparo may supply components to Daimler for its CVs

German automobile manufacturer Daimler is in talks with UK-based Caparo group to source its supply components for the commercial vehicle business proposed in India.

Angad Paul, CEO of Caparo Group was quoted as saying, by government press agency PTI, that they are into talks with Daimler AG and they had good relations with them, this was said in response to a question posed on the latest news. Daimler is all set to introduce, from Mitsubishi Fuso stable, light weight trucks in the domestic Indian market by 2010. This is part of the company’s overall expansion strategy in the Indian auto market.

In a response to a question, whether Caparo group was considering a partnership with the German giant for the business of Commercial vehicles, Angad Paul replied in the negative and stressed that it was not the company’s immediate goal to make partnership with specific original equipment manufacturer.

The bus project of the Caparo group was a stand alone project and had no partnerships whatsoever. All they needed was some technology for the chassis and making something very specific, due to its technological constraints. The downside of partnering with an OEM was, it would come at the cost of shunning by other OEM’s from buying the group’s parts, which by all standards doesn’t make any sense.

Lord Swaraj Paul-led Caparo Group in 2008 signed a technical deal with South Korean car maker Hyundai to build luxury buses in India, but all did not go well as the venture was shelved due to unfavorable market condition.

Prior to this, Daimler planned to set up a facility in the south Indian city of Chennai in a JV with the Hero group with an investment of Rs 4,400 crores. Even this turned out to be contrary to the plan, after Hero Group’s intent to pull out of the venture was announced. Daimler then went solo and took hold of the 40% stake of the Munjals for Rs 78.48 crores in 2009.

Asked if Caparo could revive its plan for the bus market in the country, Angad Paul tactfully said, there are people who might want to venture into the bus market of India and it will be happy to supply components to them. He further added that the company was being flexible in all its initiatives, so that it does not take any hasty or unwarranted decisions.

While no news has come out with regards to the announcement for the luxury bus plans with Korean automaker Hyundai, Caparo has envisioned a manufacturing plant on 20 acres of land in south India with intent to produce 1,500 buses per annum.

Recently it has scouted for location in places including Nellore (Andhra Pradesh) and Oragadam, Sriperumbudur (Tamil Nadu).